Slide 1: Teekay's First Quarter 2004 Earnings Presentation
Teekay’s First Quarter 2004 Earnings Presentation April 22, 2004 NYSE: TK www.teekay.com
Slide 2: Forward Looking Statements
Forward Looking Statements This report contains forward-looking statements (as defined in Section 21E of the Securities Exchange Act of 1934, as amended) which reflect management’s current views with respect to certain future events and performance, including statements regarding the Company’s futur
Slide 3: 1st Quarter Highlights
1st Quarter Highlights Highest quarterly net income of $189 million, or $4.37 per share an EPS increase of over 230% compared to the first quarter of 2003 Record performance in every segment Announced Naviera F. Tapias acquisition: Immediately accretive to earnings and adds approximately $
Slide 4: World Oil Demand
World Oil Demand Year-on-Year Change OECD China Other Non-OECD World 2,500 2,000 1,500 1,000 Thousand B/D 500 0 -500 -1,000 -1,500 1q00 2q00 3q00 4q00 1q01 2q01 3q01 4q01 1q02 2q02 3q02 4q02 1q03 2q03 3q03 4q03 1q04 2q04E 3q04E 4q04E Source: IEA Teekay Shipping Corporation 4
Slide 5: Global Oil Demand - Growing Strongly Throughout the Seasons
Global Oil Demand - Growing Strongly Throughout the Seasons 83.0 2004E 81.0 2003 79.0 2002 Million B/D 2001 2000 1999 77.0 75.0 73.0 1st quarter 2nd quarter 3rd quarter 4th quarter Source : IEA Teekay Shipping Corporation 5
Slide 6: Changes in World Oil Production vs. Changes in Oil Price
Changes in World Oil Production vs. Changes in Oil Price Non-OPEC OPEC WTI 8.0 40 6.0 35 Typical Spring oil price drop 4.0 30 US$ per Barrel Million B/D 2.0 25 0.0 20 -2.0 High oil price spurs 15 -4.0 OPEC production -6.0 10 Nov-01 Nov-02 Nov-03 May-01 May-02 May-03 Jan-01 Jul-01 Jan-02 Jul-02 Jan-0
Slide 7: Tanker Supply - Outlook
Tanker Supply - Outlook Deliveries Deletions On Order Net Change 40 30 20 Million Deadweight 10 0 -10 Mandatory -20 Scrapping 4.5 mdwt mandatory scrapping 34 mdwt 17.4 mdwt voluntary scrapping -30 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 + Source: CRS Teekay Shipping Cor
Slide 8: World Tanker Supply / Demand Balance to Remain Tight Through 2006
World Tanker Supply / Demand Balance to Remain Tight Through 2006 2004/2005 2006 (mdwt) (mdwt) Newbuilding deliveries 59 18 less: mandatory scrapping * 34 1 Net fleet growth 25 17 Tanker demand growth ** 23 12 Change in supply / demand 2 5 balance * excludes any voluntary scrapping ** based on 2% pe
Slide 9: World Tanker Utilization vs. Aframax Average Earnings
World Tanker Utilization vs. Aframax Average Earnings Utilization TCE 100 50,000 98 45,000 96 40,000 90% utilization is 94 considered full use of 35,000 the tanker fleet. Percent Fleet Utilization US$ per day 92 30,000 90 25,000 88 20,000 86 15,000 84 10,000 82 5,000 80 0 1q94 1q95 1q96 1q97 1q98 1q
Slide 10: Tanker Newbuilding Prices Rising Rapidly
Tanker Newbuilding Prices Rising Rapidly Korean Shipyards – Waiting Time for New Deliveries Japanese Steel Plate Price Indexed (Jan.2003=100) 4.0 170 3.6 years 3.5 160 $524 / Tonne 3.0 150 Almost doubled 2.5 140 + + 55% Years 2.0 1.9 years 130 1.5 120 1.0 110 $335 / Tonne 0.5 100 0.0 90 Jan. 2003 Ap
Slide 11: Spot Tanker Rates
Spot Tanker Rates Aframax Suezmax VLCC 90,000 80,000 70,000 60,000 US$ per Day 50,000 40,000 30,000 20,000 Seasonal decline but rates 10,000 remain historically high 0 Apr-04 1q04 1994 1995 1996 1997 1998 1999 2000 2002 2003 2001 Source: CRS Teekay Shipping Corporation 11
Slide 12: Quantum Leap in Fixed-rate Segment Cash Flow
Quantum Leap in Fixed-rate Segment Cash Flow * 450 400 350 CAGR = 58% Tapias 300 $ millions 250 Navion 200 Organic 150 Growth 100 Base 50 0 2002 2003 2004 2005 * Long-term fixed-rate cash flow from vessel operations Teekay Shipping Corporation 12
Slide 13: Transaction Summary
Transaction Summary Teekay will acquire Naviera F. Tapias S.A., Spain’s largest provider of marine energy transportation Total enterprise value of approximately $810 million (cash and assumption of existing debt), and $540 million in newbuilding commitments Large modern fleet of LNG carriers a
Slide 14: Investment Rationale
Investment Rationale Provides attractive entry for Teekay into high growth LNG shipping sector Further extends Teekay’s position as the world’s leading shipper of seaborne oil Positions Teekay for further growth in Spain through joint venture with existing Tapias shareholders Significantly i
Slide 15: Summary of Operating Results
Summary of Operating Results Three Months Ended (in thousands of U.S. dollars, except per share data) Mar. 31, 2004 Mar. 31, 2003 % change (unaudited) (unaudited) Net voyage revenues $ 447,567 $ 212,898 110% Spot-rate cash flow from vessel operations $ 192,055 $ 117,355 64% Fixed-rate cash flow from
Slide 16: Summary Income Statement
Summary Income Statement Three Months Ended March 31, December 31, 2004 2003 (unaudited) (unaudited) NET VOYAGE REVENUES 447,567 340,599 OPERATING EXPENSES Vessel operating expenses 48,912 57,239 Time-charter hire expense 108,665 102,274 Depreciation and amortization 53,614 52,447 General and admini
Slide 17: Remaining Newbuild Commitments
Remaining Newbuild Commitments $300.0 $250.0 Teekay Tapias $200.0 $ millions $150.0 $100.0 $50.0 $0.0 2004* 2005 2006 2007 2008 $ millions 2004 2005 2006 2007 2008 Arranged Financing $177 $135 $83 $71 0 In Negotiations $83 $103 0 $25 $51 Total $260 $238 $83 $96 $51 * Note: Represents commitments fro
Slide 18: Pro Forma Capital Structure
Pro Forma Capital Structure Teekay as at March 31, 2004 adjusted for Tapias acquisition (in thousands of U.S. dollars) Pro Forma March 31, 2004 Acquisition of March 31, 2004 Teekay Tapias Consolidated Cash 304,009 304,009 Debt 1,569,715 780,000 ** 2,349,715 Net Debt 1,265,706 780,000 2,045,706 Share
Slide 19: Total Fixed Charges Covered by Fixed Rate Cash Flow Alone
Total Fixed Charges Covered by Fixed Rate Cash Flow Alone Fixed Charges Coverage from Fixed-rate Segment in 2005 in $ millions Projected 2005 CFVO - Fixed - rate Segment Only $ 400.0 * (A) Projected 2005 Fixed Charges Net Interest Payments $ 120.0 * Principal Payments $ 210.0 * Drydock Costs $ 20.0
Slide 20: Significant Operating Leverage
Significant Operating Leverage $10.00 2004: $9.00 Spot Rate increase $1,000 TCE/day EPS Increase above $13,000 / day ~ $0.16 - $0.17 / qtr $8.00 $7.00 Quarterly Earnings Per Share ($) $6.00 $5.00 Actual Q1 2004 EPS $4.00 EPS using Clarkson Q2, 2004 $3.00 quarter to date TCE Quarterly for 2004 $2.00
Slide 21: Appendix – Reconciliation of Cash flow from vessel operations
Appendix – Reconciliation of Cash flow from vessel operations Cash flow from vessel operations represents income from vessel operations before depreciation and amortization expense. Cash flow from operations is included because such data is used by certain investors to measure a company's financia